Debit Card


DEFINITION of 'Debit Card'

A payment card that deducts money directly from a consumer’s checking account to pay for a purchase. Debit cards eliminate the need to carry cash or physical checks to make purchases. In addition, debit cards, also called check cards, offer the convenience of credit cards and many of the same consumer protections when issued by major payment processors like Visa or MasterCard. Unlike credit cards, they do not allow the user to go into debt, except perhaps for small negative balances that might be incurred if the account holder has signed up for overdraft coverage. However, debit cards usually have daily purchase limits, meaning it may not be possible to make an especially large purchase with a debit card.


Debit cards serve a dual purpose: they allow the user to withdraw money from her checking account through an ATM or through the cash-back function many merchants offer at the point of sale, and they also allow the user to make purchases. ATM cards, by contrast, only allow the user to withdraw money from an ATM, while credit cards only allow purchases unless the credit card holder has a PIN-enabled cash advance feature (and the cash advance will incur interest, unlike withdrawing cash from a checking account).

Debit card purchases can usually be made with or without a PIN. If the card has a major payment processor’s logo, it can be run as a credit card, and the cardholder won’t need to take the risk of exposing their PIN number. The money will still come directly out of the cardholder’s checking account and there won’t be any finance charges when the debit card is run as a credit card. Some debit cards also offer reward programs similar to credit card reward programs, such as 1% back on all purchases.

Every transaction made with a debit or check card will appear on the account holder’s monthly statement, making it easy to keep track of purchases. Consumers are effectively making their purchases in cash – that is, with money they actually have, as opposed to money borrowed on credit – but unlike cash purchases, there’s no way to lose track of amounts spent on a debit card. And while lost or stolen cash is gone forever, a lost or stolen check card can be reported to the bank, which can deactivate the card, remove any fraudulent transactions from the cardholder’s account and issue a new card.

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    NetSpend does not report to credit bureaus in any capacity. NetSpend is a prepaid debit card program that allows cardholders ... Read Full Answer >>
  2. Can Netspend cards be used internationally?

    NetSpend cards can be used internationally, and they are accepted at any location that accepts debit Visa or MasterCard. ... Read Full Answer >>
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    NetSpend lets cardholders overdraw their accounts, but only if they previously enrolled in the overdraft protection service. ... Read Full Answer >>
  5. Does NetSpend work with PayPal?

    NetSpend works with PayPal; a PayPal account can be linked to a NetSpend account, and vice versa. Also, PayPal allows its ... Read Full Answer >>
  6. How do NetSpend cards work?

    NetSpend prepaid MasterCard and Visa cards are popular prepaid debit cards requiring no minimum balance and no credit check. ... Read Full Answer >>
  7. Where can you get NetSpend cards?

    You can get a NetSpend card online at or through a participating retailer. NetSpend cards are prepaid debit ... Read Full Answer >>
  8. Where can you buy NetSpend reload packs?

    You can only purchase NetSpend reload packs at Giant Eagle, Albertsons, Roundy's and Pathmark supermarkets. NetSpend cards ... Read Full Answer >>
  9. What are the differences between debit cards and credit cards?

    Debit cards and credit cards work in similar ways. Both carry the logo of a major credit card company, such as Visa or MasterCard, ... Read Full Answer >>
  10. What happens when my bank account is debited?

    When your bank account is debited, it means money is taken out of the account. The opposite of a debit is a credit, in which ... Read Full Answer >>
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